DeMarrais: FTC seeks to unplug Rachel

It was only a matter of time before federal regulators caught up with sweet-talking Rachel.

Faced with an increasing number of complaints, the Federal Trade Commission announced last week that it is seeking to pull the plug on five companies allegedly responsible for millions of illegal robocalls from "Rachel" and "Cardholder Services."

Federal courts in Arizona and Florida granted the FTC's request to temporarily halt the operations, alleging that the companies violated federal do-not-call laws and deceived consumers into paying hundreds or thousands of dollars in fees on phony promises that they could reduce credit-card interest rates.

"At the FTC, Rachel from Cardholder Services is public enemy number one," FTC Chairman Jon Leibowitz said in a statement. "We're cracking down on illegal robocalls by bringing law enforcement actions and pursuing technical solutions to the problem."

It's about time! Consumers have become all too familiar with Rachel.

The FTC says it gets more than 200,000 complaints each month about robocalls, many from "Rachel," that pitch consumers with a supposedly easy way to save money by reducing their credit-card interest rates.

At a recent Robocall Summit, the FTC issued a challenge to the public, offering a $50,000 cash prize for the best technical solution to block illegal robocalls on landlines and mobile phones.

Typically, the calls come with a prerecorded message from "Rachel" or someone else from "Cardholder Service," purporting to have an "important message" regarding an opportunity to reduce high credit-card interest rates.

Most consumers can't screen the calls using Caller ID, as the incoming number is often "spoofed," or displayed as a false number, the FTC alleged. "In many cases, the name displayed on the Caller ID is so generic, such as 'Card Services,' that it provides little information about who is calling."

Consumers who reach a live telemarketer were pitched allegedly deceptive offers to have their credit-card interest rates substantially reduced, sometimes to as low as 6.9 percent or even zero percent, guaranteeing that lowering card interest rates will save the consumers at least $2,500 in finance charges in a short period of time, the FTC said.

After consumers have been "approved" for the program, the telemarketer informed them that there is an up-front fee, typically ranging from several hundred dollars to nearly $3,000, the FTC alleges.

To persuade them to pay the fee, telemarketers often said that it would be more than offset by the money saved through the program.

After consumers paid the fee, they typically found that the companies did little or nothing to lower their credit-card interest rates, the FTC said.

"The only thing that some companies do is to initiate three-way calls with consumers' credit-card issuers and orally request a rate reduction, a request that consumers could make on their own and that invariably is denied," the FTC said.

Cable credit

Cablevision, Comcast and Time-Warner say customers whose service was disrupted by Sandy can receive credit for any days they were without service, even if the disruption was caused by a loss of electrical power.

But you must request the credit for regular monthly charges during the period when TV, phone or Internet were unavailable — including when there was no electricity — within 30 days of service being restored. Check with your cable company for details.